Bullish And Bearish Forecasts For Gold In 2015

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This article provides different forecasts and predictions for the price gold in 2015. We are not in favor of price predictions. However, we believe there is value in forecasting. A forecast is not about predicting specific prices but rather describing a future situation, mostly based on ongoing trends.

The idea behind this article is to look at different bullish and bearish expectations by different analysts and financial institutions. Readers should not take this as investment advice, as market predictions have only been accurate in 48 percent of the time.

Bullish outlook

Gold analyst Ronald-Peter Stoeferle released earlier this year his gold price model for 2015 and beyond. His model shows a long-term gold price of USD 1,515 per ounce.

According to George Gero of RBC Capital Markets, gold will likely reverse its downtrend in 2015. He said on CNBC money was leaving the gold market in search for higher yield in equity and bond markets. Moreover, the rally in the U.S. dollar was not very gold friendly. Lastly, the crude oil collapse is quite anti-inflationary. But the key argument in favor of gold for next year is related to monetary policy and a delayed effect of the extreme monetary stimulus in Europe, China and Japan.

Marc Faber predicts the gold price might rise to $3,648 by 2018 and the gold price might rise to $7,829 by 2023, driven by money supply and the monetary base.

Jeffrey Nichols, Senior Economic Advisor to Rosland Capital, sees uncertainty in the near-term but feels fairly confident that gold will be considerably higher at the end of 2015. The drivers for higher gold: U.S. economic performance and monetary policy, a return to realism on Wall Street and a substantial correction, the insatiable appetite for gold in China, India, and other East Asian markets.

Gold analyst Gary Christenson says there is no guarantee that gold has bottomed and will reach new highs in the next two years, but massive demand, geopolitical anxiety, more war, time cycles, and chart based analysis all suggest that a lasting bottom has been formed and that the probabilities strongly favor continued strength instead of price weakness.

Commerzbank expects gold to bottom out around $1,125 in Q2 of 2015. “We expect the gold price to remain under pressure initially in the first half of next year on the back of growing speculation about increasingly imminent interest rate hikes in the US. The gold price is likely to bottom out at the onset of the cycle of rate hikes in the second quarter. We envisage the price falling to $1,125 per troy ounce on average in the second quarter, though a gold price of below $1,100 is also conceivable for a time.”

Neutral or bearish outlook

BMO Chief Economist Doug Porter warned that interest rates could move higher sooner rather than later in 2015. His 2015 outlook for gold is that it will trade, broadly speaking, where it is today. His assumption for next year is $1,190 per ounce. If the market perceives inflation is becoming a concern, it would be constructive for the gold price.

Analysts at Thomson Reuters GFMS expect gold to trade lower in the first half of the year because of the Fed’s expected action. In the second half, the firm believe that gold will likely consolidate. The average gold price would be $1,175.

U.S. Bank Wealth Management expects lots of pressure for the precious metals because of the looming Federal Reserve interest rate hikes and the stronger U.S. dollar.

TD Securities believes gold will be under pressure in the first half of 2015 because of slow growth in China and Europe, and the sell off in crude oil. The growing deflationary trend along with expected rate hikes would dempen demand from investors who buy gold as a hedge. TD Securities lists its average 2015 gold price at $1,225.

S&P credit analyst Jarrett Bilous said: “We have a relatively stable gold price at $1,200 through 2015-16, and that incorporates our expectation for relatively modest US inflation below 2% through 2016. But we also believe that gold prices will remain particularly susceptible to shifts toward higher US interest rate expectations and a stronger US dollar. We are not forecasting a gold price below $1,200, but there’s certainly the potential that prices could weaken given that, at $1,200 per ounce, the price of gold is close to 50% higher than it was in 2008 when the US started cutting interest rates to support the US financial system.”